question archive Explain why the government's budget deficit might be in a large deficit

Explain why the government's budget deficit might be in a large deficit

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Explain why the government's budget deficit might be in a large deficit.

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The budget deficit is the condition when government expenses are more than its income. The government spends more than revenue when it expects that the expenditure will be beneficial in the near future. For example; government spent a high volume of money on making bridges and roads in a specific year, but the benefit of such programs will help in the future for a longer period that helps to compensate that deficit. A government budget deficit can be larger if the expenditure made on the specific project does not provide expected benefit to the society, which increases the budget deficit as it needs a continuous expenditure on such projects.